VAT and Insurance
The types of job we get on our website range from small (sub £100) to very large (over £5000). Regardless of whether it is a simple electrical problem or a conservatory build, VAT and insurance are two important things to look out for.
VAT (Value Added Tax)
Your written estimate will typically have itemised breakdowns of various costs (material and labour), preparatory work and post job clean up etc. It must also separately include VAT as a line item. If your estimate does not show this, ask your tradesman if he is VAT registered and if so ask for it to be included on the quote. There are three very important reasons to do this:
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It can add up to a large amount on your bill - you do not want to be stung by it at the last minute!
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Good tradesmen, whether they are 1-2 people boiler repair outfits or large construction companies, maintain clean books. Not showing VAT on a bill could mean something fishy, and well worth staying clear of
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Bigger tradesmen have to be VAT registered by law whereas, if you are a small trader, you are allowed to stay unregistered. This does not mean small companies will not do as good a job, but it is good to know what you are dealing with
Of course, a tradesman may have just forgotten to add VAT, or assumed you are aware of this, so just ask. Also make sure, if VAT is included that the tradesman has supplied the VAT registration number - you don't want to have to pay VAT to a non-VAT registered tradesman.
Another important flag to remember in this context is cash deposits: avoid cash deposits upfront. Or, if you feel comfortable paying in cash, always ask for a receipt. If a tradesman tries to get you to settle with cash, and promises no VAT charge in return, the chances are you may be left with no recourse should a bad situation arise.
Different types of work carry different VAT charges. So do different types of properties - a barn property may carry a higher VAT charge than a listed property. For the Builder to act in compliance with this, you would need to provide him with a Local Area (county council) approval notice (i.e. an approval of the works or Notification of Grant of Listed Building Consent).
If it is a small job, you may not be too bothered, but if it is a large amount, it is worth finding out. The best way is to go the HMRC website www.hmrc.co.uk, or you can contact them on their national helpline which is 0845 010 9000.
Insurance requirements
There are 3 different areas of insurance or protection to think about.
You should ensure that the tradesman you are contracting with has an insurance backed warranty for the type of work you intend to be carried out. Of course, you can use discretion in the matter and your own judgement: raking leaves is a very different proposition to fixing your ceiling. However, in general the insurance should cover damage to your and your neighbours' properties. Make sure that either the tradesman or your own insurance covers death and personal injury. Ask each tradesman what their insurance covers them for, and try to see their insurance papers if possible. Also, check to see what level of cover they have and whether it covers your needs. Insurance covers are typically high (£1-£2 million) but it is always good to establish the exact amount.
Separately, look to understand what kind of post-work warranties the trader is willing to grant. If it is a big job, such as a retiling or a loft conversion or kitchen and bathroom equipment installation, make sure you agree the warranty in the contract. If there are significant component installations, such as a boiler pump, make sure you get a copy of the manufacturer's warranty. In addition, know the process whereby you ask for the warranty to be carried out: for example, within 2 months of the work completed, you may want to write to the tradesperson with any defects that you have found since. Ask for big work to be covered by an insurance backed warranty. For new builds for example, it is a good idea to visit www.nhbc.co.uk or a similar scheme.
Check to see what coverage you have yourself. Does paying by your credit card help you to claim refunds on purchases? Sometimes they do. You may also want to investigate whether your own home insurance covers you for public liability insurance which is damages or injuries sustained when someone is visiting your property.